"I say tonight to Will Hodgman, don't take us back to war," Mr McKim said. "Protect those forests and protect our people from another four years of bitter conflict."

Tasmanian Premier Lara Giddings voting at the St Aidan's Church Hall polling place in the Hobart suburb of Lindisfarne. Photo: Peter Mathew

But Mr Hodgman went to the election promising to tear up a peace deal drawn up by industry and environmental groups.

"We intend to deliver on all those things we have committed to Tasmanians," he said. "That includes in our forest industry, and supporting those regional towns who have voted resoundingly for a change for a better state."

Ms Giddings was returned to parliament, but her potential successor David O'Byrne looked to have been squeezed out by the size of the swing to the Liberals, potentially leaving the ALP with as few as six seats.

In the cut-up of preferences, the Greens were clinging to four seats, with the final make-up of the House of Assembly was unlikely to be known for weeks.

"After 16 years Tasmanians have voted for change and I congratulate Will Hodgman," Ms Giddings said. "I'm proud to be part of this Labor government and all we've done."

She admitted that it had been difficult to sell the message of Labor achievements after so long in power, but her campaign was dogged by dissent inside the party.

Backbencher Brenton Best, repeatedly voiced his disapproval of the party leader, and said Labor should have broken an alliance with the Greens.

As he trailed in his own seat, Mr Best repeated his demands. "I had suggested she should have stood aside and if she had we might have had a different result tonight," he said.

Despite a prominent campaign by billionaire party leader Clive Palmer, the Palmer United Party's vote fell away from the 2013 federal result that brought in senator-elect Jacquie Lambie in Tasmania.

"I think they would have done better to pack up and go home a fortnight ago," said Greens MP Tim Morris. "They would have had a better result."